Unemployment

Unemployment and Underemployment, July 2010

On August 6, the Labor Department released unemployment data for the month of July.(1) Some 14.6 million people were officially counted as unemployed, 9.5% of the workforce. Nearly half of these unfortunate people have been out of work for over six months and they are unlikely to find a job any time soon. For each new job opening, there are five unemployed people looking for work.(2)

But the official numbers don’t tell the whole story. To be counted as unemployed, someone must want a job and be actively looking for one. But, today, many people out of work are no longer looking. They may have given up hope of finding a job, taken on child care responsibilities since they cannot work, or have others reasons why they have stopped their job search. These “missing” unemployed workers number at least 3.9 million. Workers are also facing under-employment. Some 8.5 million people are working part time when they want full-time work.

All together, the officially unemployed (14.6 million), the “missing” unemployed (3.9 million) and the involuntary part-time (8.5 million) workers total 27 million people. This is 17% of the potential workforce or one in every six workers. The true number of jobless or under-employed workers (27 million) is nearly twice the number counted as officially unemployed (14.6 million). Moreover, polls show that 55% of adults in the labor force have experienced either unemployment, a pay cut, reduction in hours, or involuntary part-time work.(1)

The burden of unemployment does not fall equally across demographic groups. Young workers and people of color are most likely to be unemployed. As a general rule of thumb, unemployment among African American is roughly double the rate among non-Hispanic whites, and the rate for Hispanics is about 50% greater than for whites. The rates for Asians and whites are typically very similar. In July, when the unemployment rate among non-Hispanic whites was 8.2%, the rate was 15.6% for African Americans, 12.1% for Hispanics, and 8.2% for Asians.(3) These numbers reflect official unemployment; the share of people who are jobless or under-employed is about double this. So about 30% of African Americans and roughly one-quarter of Hispanics are jobless or working too few hours. In July, 8.5% of workers age 25 to 54 were unemployed compared with 15.6% of 20- to 25-year olds. So in total, about one-third of 20- to25-year olds are without work or working part time when they want full time jobs. The nation is in a crisis.